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Trust in government and its effect on preferences for income redistribution and perceived tax burden

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  • Eiji Yamamura

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Abstract

This paper explores how trust in government shared by neighbors is associated with individual preferences for income redistribution and individual perceptions regarding income tax burden. Using individual-level data from Japan, a nation with shared homogenous racial and cultural backgrounds, this paper controls for unobservable heterogeneity among Japan’s population, thus reducing estimation bias. Three measures for trust in government are used: “trust in ministries and government agencies”, “trust in diet members”, and “trust in members of municipal councils”. After controlling for individual characteristics, the key findings are: (1) people are more likely to express preferences for income redistribution when trust in government in their residential area is high; (2) people are more likely to perceive their tax burden as low when trust in government in their residential area is high; and (3) when the sample is divided into people with above average income and those with below average income, these results are only clearly observed for people with above average income and not those with below average income. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Eiji Yamamura, 2014. "Trust in government and its effect on preferences for income redistribution and perceived tax burden," Economics of Governance, Springer, vol. 15(1), pages 71-100, February.
  • Handle: RePEc:spr:ecogov:v:15:y:2014:i:1:p:71-100
    DOI: 10.1007/s10101-013-0134-1
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    Cited by:

    1. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-145, January.
    2. Fabio Sabatini & Francesco Sarracino & Eiji Yamamura, 2014. "Social norms on rent seeking and preferences for redistribution," Econometica Working Papers wp55, Econometica.
    3. Fabio Sabatini & Marco Ventura & Eiji Yamamura & Luca Zamparelli, 2017. "Fairness and the unselfish demand for redistribution by taxpayers and welfare recipients," Econometica Working Papers wp64, Econometica.
    4. Niclas Berggren & Christian Bjørnskov & David Lipka, 2015. "Legitimacy and the cost of government," Public Choice, Springer, vol. 162(3), pages 307-328, March.
    5. Ilyana Kuziemko & Michael I. Norton & Emmanuel Saez & Stefanie Stantcheva, 2015. "How Elastic Are Preferences for Redistribution? Evidence from Randomized Survey Experiments," American Economic Review, American Economic Association, vol. 105(4), pages 1478-1508, April.
    6. Yamamura, Eiji, 2014. "Time preference and perceptions about government spending and tax: Smokers’ dependence on government support," MPRA Paper 55659, University Library of Munich, Germany.
    7. Corneo, Giacomo & Neher, Frank, 2015. "Democratic redistribution and rule of the majority," European Journal of Political Economy, Elsevier, vol. 40(PA), pages 96-109.
    8. Lorna Zischka, 2014. "Social Capital Stocks, Giving Flows and Welfare Outcomes," Economics & Management Discussion Papers em-dp2014-04, Henley Business School, Reading University.
    9. Eiji Yamamura, 2014. "Comparing the influence of conflict on the perceptions of rich and poor: testing the hypothesis of Acemoglu and Robinson," ISER Discussion Paper 0911, Institute of Social and Economic Research, Osaka University.

    More about this item

    Keywords

    Trust in government; Redistribution; Perception of tax; Inequality; D30; D63; H20; Z13;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • D30 - Microeconomics - - Distribution - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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